(Photo: Reuters)

The five banned companies are Huawei, ZTE, Hytera Communications, the Hangzhou Hikvision Digital Technology Company, and the Zhejiang Dahua Technology Company. The ban follows previous attempts by the Trump administration to purge “untrustworthy” Chinese applications from the US digital network. Washington is concerned that Chinese products are being used for espionage and other activities that threaten US national security.

Security threats

China will continue to be the world’s largest internet market because it has the largest number of internet users and owns the world’s most advanced 4G and 5G mobile networks. But Chinese companies like Huawei, the short video sharing app TikTok, and the WeChat messaging app, have become targets in the US-China tech war.

Calling TikTok and WeChat “serious threats” to national security, President Trump has said the TikTok app could be used for disinformation campaigns that benefit China, and the US must take aggressive action against TikTok’s owners to protect US national security. He has given Microsoft 45 days to complete a takeover of TikTok's US operations. Trump said the WeChat app automatically collects a large amount of information from users and allows China to access the personal information of Americans. A ban on WeChat has dismayed Chinese Americans and others with relationships in China because this app is widely used to connect China to the world.

Of course, China is not sitting still for this challenge to its ambition to dominate global technology. Accusing the US of having a narrow vision and bullying Chinese tech companies, Beijing has warned that Chinese companies have no choice but to fight until the end. It is likely that the Chinese government will now label Apple untrustworthy just as the US did with Huawei.

Both sides will suffer

The US and China will both suffer as a result of their tit-for-tat tech squabble. US sanctions will force foreign investors to think twice before partnering with Chinese companies. Beijing has made significant political and financial investments in its world-leading technologies, but Washington is now using its dominance in Internet infrastructure and operating systems to block China’s ambitions.

The bans could affect other foreign companies in the US that might want to use Chinese technology, including the more than 800 Japanese companies who are currently doing business with the US government. The ban on Chinese internet apps could also cut off the revenue of American brands that are currently being marketed to consumers in China.

The Chinese company Alibaba, one of the world’s largest internet retail businesses, is expected to be the next target in the US-China tech war, and more dramatic developments are expected in the coming weeks.